CY09 portfolio

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(05-08-2015, 08:28 AM)yeh Wrote: hi CY09
your portfolio consists too much penny share. small cap.
There is nothing wrong with portfolio with many penny shares. My colleague's father became a multi-millionaire solely by investing in pennies. His trick is to never hold pennies for long term. Very few penny counters in STI can really withstand long term.
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(05-08-2015, 08:28 AM)yeh Wrote: hi CY09
your portfolio consists too much penny share. small cap.

dear yeh, i dont see any issue in having too many penny share in a portfolio. As long as there is proper allocation of risk and one is aware of his portfolio return, one can do off with all small cap. To me i dont see a clear link between risk and small cap stocks, can be well debated but its a grey area.
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Big cap doesn't automatically mean lesser risk. Small cap provides more opportunities to OPMI like us, because big boys are ignoring them due to their constraints.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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(02-06-2015, 05:36 PM)specuvestor Wrote: We know that Buffett has a focused portfolio. But it also has a diversified sector concentration. Personally I think the idea is to be concentrated in your allocation to a stock in one sector, hence I often alluded to the idea of recognising the alpha stock, and then try to pick other stocks from other sectors. Having more than 2 stocks in a sector in a country generally means one is undecided or not done enough homework.

Can't disagree that Buffett has a focused portfolio as his net worth is tied to BRK. However, BRK itself is widely diversified.
http://www.berkshirehathaway.com/subs/sublinks.html
http://www.cnbc.com/berkshire-hathaway-portfolio/

Even when he was managing smaller sums, each of his large positions was allocated only 5-10% of total asset. [Letter: 24 Jan 1962]

If Warren Buffett's large position was only 10%, what make us more confident than the man himself? Personally, the important job is really picking and keeping good stocks and not limiting the number of stocks in the portfolio. You get rid of a stock because it is bad, not because it is No. xxx.

Remember this? "Too much of a good thing can be wonderful."

Listen to what he has said, but also look at what he has done. Much like the dividend irony of BRK.
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Quote:Even when he was managing smaller sums, each of his large positions was allocated only 5-10% of total asset. [Letter: 24 Jan 1962]

Actually Buffett had a few large positions in his hedge fund at various points in time.

See the section on "Diversification" in the Jan 1966 letter. The relevant lines for this discussion -
"We probably have had only five or six situations in the nine-year history of the Partnership where we have exceeded 25%".
"We presently have two situations in the over 25% category - one a controlled company, and the other a large company where we will never take an active part."

I also remember reading somewhere that AMEX was a 35% position after he collected during the salad oil scandal.

But again, it takes an extraordinarily high level of confidence to put on such big positions, and an extraordinarily high level of skill (and some luck) to profit from such bets.
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(06-08-2015, 03:17 PM)D123 Wrote:
Quote:Even when he was managing smaller sums, each of his large positions was allocated only 5-10% of total asset. [Letter: 24 Jan 1962]

Actually Buffett had a few large positions in his hedge fund at various points in time.

See the section on "Diversification" in the Jan 1966 letter. The relevant lines for this discussion -
"We probably have had only five or six situations in the nine-year history of the Partnership where we have exceeded 25%".
"We presently have two situations in the over 25% category - one a controlled company, and the other a large company where we will never take an active part."

I also remember reading somewhere that AMEX was a 35% position after he collected during the salad oil scandal.

But again, it takes an extraordinary high level of confidence to put on such big positions, and an extraordinary high level of skill (and some luck) to profit from such bets.

I believe the "two situations" were AMEX and Berkshire Hathaway.

Buffett enjoys the advantage of turning a "General" into a "Control" that most investors don't. His AUM in 1966 was substantially larger than that in 1962, and hence a greater margin of safety so to speak. I feel that the 1962 "limits" are more instructional for buddies with smaller AUM.
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